Correlation Between Freight Technologies and Salesforce

Can any of the company-specific risk be diversified away by investing in both Freight Technologies and Salesforce at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Freight Technologies and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Freight Technologies and Salesforce, you can compare the effects of market volatilities on Freight Technologies and Salesforce and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Freight Technologies with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freight Technologies and Salesforce.

Diversification Opportunities for Freight Technologies and Salesforce

-0.77

Correlation Coefficient

Freight Technologies  Salesforce

Pay attention - limited upside

The 3 months correlation between Freight and Salesforce is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Freight Technologies and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Freight Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Freight Technologies are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of Freight Technologies i.e., Freight Technologies and Salesforce go up and down completely randomly.

Pair Corralation between Freight Technologies and Salesforce

Given the investment horizon of 90 days Freight Technologies is expected to under-perform the Salesforce. In addition to that, Freight Technologies is 3.38 times more volatile than Salesforce. It trades about -0.08 of its total potential returns per unit of risk. Salesforce is currently generating about 0.24 per unit of volatility. If you would invest  25,297  in Salesforce on September 12, 2024 and sell it today you would earn a total of  9,585  from holding Salesforce or generate 37.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Freight Technologies  vs.  Salesforce

Freight Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freight Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Salesforce

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Freight Technologies and Salesforce

The main advantage of trading using opposite Freight Technologies and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freight Technologies position performs unexpectedly, Salesforce can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Salesforce will offset losses from the drop in Salesforce's long position.

The idea behind Freight Technologies and Salesforce pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.